x
Test & Measurement

Radcom Reports Q3

TEL AVIV -- RADCOM Ltd. (RADCOM) (Nasdaq and TASE: RDCM) today announced financial results for the third quarter and nine months ended September 30, 2006.

Revenues for the third quarter of 2006 were $6.7 million, an increase of 14% compared with $5.9 million for the third quarter of 2005, and 18% compared sequentially with the $5.7 million in the second quarter of 2006. This represents the Company's 12th straight quarter of year-over-year revenue growth and its highest quarterly revenues since the fourth quarter of 2000. Gross margin for the third quarter of 2006 was 70% compared with 66% for the third quarter of 2005 and 70% for the second quarter of 2006.

On the basis of U.S. generally accepted accounted principles (GAAP), the Company recorded net income for the third quarter of 2006 of $570,000, or $0.04 per basic share ($0.03 diluted). Net income for the quarter included non-cash share-based compensation expense of $131,000 taken in respect of the Company's mandatory adoption of Statement of Financial Accounting Standards No. 123 (revised 2004), "Share-Based Payment" ("SFAS 123R"). SFAS 123R requires that companies recognize the fair value of share-based incentives as compensation.

The Company is also presenting its results on a non-GAAP basis excluding share-based compensation to provide investors and management with insight into RADCOM's underlying operating results. On a non-GAAP basis, RADCOM's net income for the third quarter of 2006 was $701,000, or $0.04 per share (basic and diluted). This is an increase of 42% compared with $492,000, or $0.03 per ordinary share (basic and diluted), for the third quarter of 2005, which did not include share-based compensation, and is more than double the Company's net income for the second quarter of 2006 as computed on the same non-GAAP basis.

Financial Results for the First Nine Months

Revenues for the first nine months of 2006 rose by 11% to $17.5 million compared to $15.8 million for the parallel period of 2005. Gross margin for the first nine months of 2006 was 69% compared to 67% for the parallel period of 2005.

On the basis of U.S. generally accepted accounted principles (GAAP), the Company recorded net income of $659,000, or $0.04 per ordinary share (basic and diluted) for the nine months of 2006. Net income for the nine-month period included non-cash share-based compensation expense of $364,000 taken in respect of SFAS 123R, as explained above.

The Company has also presented its results on a non-GAAP basis excluding share-based compensation to provide investors and management with insight into RADCOM's underlying operating results. On a non-GAAP basis, RADCOM's net income for the first nine months of 2006 was $1.0 million, or $0.06 per ordinary share (basic and diluted), an increase of 40% compared with $729,000, or $0.05 per share (basic and diluted), for the first nine months of 2005, which did not include share-based compensation.

Comments of Management

Commenting on the results, Mr. Arnon Toussia-Cohen, President and CEO, said, "We are pleased to report another quarter of growth in line with our forecasts and strategies, demonstrating the steady progress that we have made in building the Company. During the past year, we have cemented our positioning as a powerhouse of next-generation network monitoring and troubleshooting solutions, through our success in both penetrating major service providers and launching cutting-edge new products.

"We have stepped up our sales and marketing efforts throughout the world to address opportunities arising in step with the growing adoption of 3G Cellular, VoIP and triple-play networks. Sales to cellular operators remain strong, and sales to VoIP service providers are rising, reflecting the growth of VoIP deployments in the marketplace. As part of our focus on the Far East, we have recently opened a new representative office in Singapore. In addition, we are very pleased to have received our first two orders for the just- released R70 probe platform, confirming the need for our high-performance technology in today's complex, ultra-high traffic environment."

Mr. Toussia-Cohen concluded, "In the year ahead, we plan to continue building our sales and marketing organization while continuing to develop all our technologies. With the goal of broadening our service offering and sales reach, we are actively exploring merger/acquisition opportunities. With strong traction, growing markets and a proven strategy, we are optimistic regarding our prospects and working to build shareholder value."

Guidance

The following statement is forward-looking in nature, and actual results may differ materially. See below under "Risks Regarding Forward Looking Statements."

Given the reliance of the Company's performance for any specific quarter on the timing of a relatively small number of relatively large orders, the Company's quarterly results of operations are subject to fluctuations. Nonetheless, management projects that the Company's revenues for the fourth quarter of 2006 will range between $7.4 million and $8.0 million.

Radcom Ltd.

Be the first to post a comment regarding this story.
HOME
Sign In
SEARCH
CLOSE
MORE
CLOSE